File image: IOL
File image: IOL

Rand firms on emerging markets rally

By Reuters Time of article published Sep 19, 2018

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JOHANNESBURG - South Africa’s rand strengthened against a softer dollar early on Wednesday as expectations that Beijing would implement stimulus to reduce the economic blow from the Sino-U.S. trade war boosted investor appetite for emerging markets.

The rand was up 0.49 at 14.8225 per dollar at 0650 GMT, having closed in New York at 14.8950.

“Hopes that China could increase economic stimulus to soften the blow of the higher U.S. tariffs also supported some emerging market currencies. The rand is expected to trade at 14.70 to 14.95 to the dollar on Wednesday,” NKC African Economics said in an early note.

China will levy tariffs on about $60 billion worth of U.S. goods in retaliation for the latest round of U.S. tariffs on Chinese products, as previously planned, but has reduced the level of tariffs it will collect on the products.

Markets were awaiting the release of August consumer inflation figures at 0800 GMT. Consensus expectations are for inflation to have risen to 5.2 percent on an annual basis, up from 5.1 percent in July.

In fixed income, the yield on the benchmark government bond due in 2026 was up 2 basis points at 9.190 percent.

Stocks opened higher at 0700 GMT, with the JSE securities exchange’s Top-40 futures index up 0.33 percent.


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